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HomeMy WebLinkAbout97-182 Resolution No. 97-182 RESOLUTION AUTHORIZING EXECUTION OF A PARTICIPATION AGREEMENT IN CITY OF ELGIN COOK COUNTY AUTOMOBILE DEALERSHIP INCENTIVE PROGRAM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Kevin Kelly, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Participation Agreement in City of Elgin Cook County Automobile Dealership Incentive Program on behalf of the City of Elgin with Robert Loquercio Enterprises, d/b/a Elgin Toyota to permit participation in the business retention rebate portion of the program, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: July 9 , 1997 Adopted: July 9 , 1997 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk PARTICIPATION AGREEMENT IN CITY OF ELGIN COOK COUNTY AUTOMOBILE DEALERSHIP INCENTIVE PROGRAM This agreement made and entered into this 1011 day of ,To J._ / , 199 7 , by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as the "City" ) and ROBERT LOQUERCIO ENTERPRISES, a Delaware corporation, d/b/a ELGIN TOYOTA (hereinafter referred to as "Elgin Toyota" ) . WITNESSETH WHEREAS, the City Council of the City of Elgin has previously enacted Ordinance No. T12-96 which provides for the establishment of an incentive program for automobile dealerships located within that area of the City of Elgin lying within Cook County; and WHEREAS, Elgin Toyota has made application to the City to participate in the business retention rebate portion of the incentive program; and WHEREAS, the City Council has determined that it is in the best interest of the City to approve Elgin Toyota' s application to participate in the business retention rebate portion of the program. NOW, THEREFORE, for and in consideration of the mutual promises and undertakings as set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto as follows : 1 . That the application of Elgin Toyota to participate in the business retention rebate portion of the City of Elgin Cook County Automobile Dealership Incentive Program is hereby approved by the City Council of the City of Elgin. 2 . That the terms of Ordinance No. T12-96 , a copy of which is attached hereto, are hereby incorporated into this agreement in their entirety. Elgin Toyota agrees to comply with all conditions and terms as specified in the automobile dealership incentive program and as set forth in the attached Ordinance No. T12-96 . 3 . That Elgin Toyota hereby agrees to remain at its present address of 1045 East Chicago Street, Elgin, Cook County, Illinois, and to continue with its retail operations of an automobile dealership at such location for at least five (5) years from May 17, 1997 . 4 . That in consideration of Elgin Toyota remaining at its present address of 1200 East Chicago Street, Elgin, Cook County, Illinois, and continuing with its retail operation of an automobile dealership at such property for at least five (5) years from May 17 , 1997 , the City agrees that Elgin Toyota is eligible to receive a retail sales tax rebate in the amount of thirty-five ( 35%) percent of the increase in retail sales tax received by the City of Elgin from the sale of automobiles . Any such rebate shall be repaid by Elgin Toyota to the City with interest of seven percent ( 7%) per year if Elgin Toyota fails to remain at such property for the five (5) year period. The rebate shall be based on the increase in sales tax over the average retail sales tax distributed to the City by Elgin Toyota during the three ( 3) years previous to May 17 , 1997 . -2- IN WITNESS WHEREOF, the parties have entered into and executed this agreement on the date and year first written above. CITY OF ELGIN ROBERT LOQUERCIO ENTERPRISES, INC. , a Delaware corporation, d/b/a ELGIN TOYOTA By 2L-, ;71.'4 By ilt,t4f1A4v3 Ma or Robert Lercio Y Its Prent Attest: Attest: Aree "'•-0 1711-et-14-s-- City Clerk M rXe A Gnadinge Its Secretary/Treasurer -3- Ordinance No. T12-96 AN ORDINANCE ESTABLISHING AN INCENTIVE PROGRAM FOR COOK COUNTY AUTOMOBILE DEALERSHIPS WHEREAS, the City of Elgin is located in Cook and Kane Counties; and WHEREAS, the real estate assessment classification system for Cook County results in a competitive disadvantage for automobile dealers operating in the Cook County section of the City of Elgin with respect to automobile dealers operating in Kane County; and WHEREAS, it is necessary to protect the city' s tax base and promote employment within the City of Elgin to provide economic incentives to automobile dealers operating in that part of the City of Elgin situated in Cook County to continue such operations and invest in capital improvements at such locations; and WHEREAS, the City of Elgin is a home rule unit within the meaning of Article VII of the Constitution of Illinois of 1970; and WHEREAS, the program established herein is in furtherance of the promotion of the economic well being of the City of Elgin, a public purpose. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS: Section 1 . Incentive Program. That there is hereby established an economic incentive program to be known as the Cook County Automobile Dealership Incentive Program. Section 2 . Sales Tax Rebate Program. Any retail automobile dealership operating in that portion of the City of Elgin located in the County of Cook that makes a minimum capital improvement to property currently owned, including furniture and fixtures, in an amount in excess of two hundred percent ( 200%) of the average amount of local retail sales tax paid to the City of Elgin in the last preceding three years shall be eligible to receive a rebate of fifty percent (50%) of the increase in sales tax in excess of the preceding three year average distributed to the City of Elgin from the sale of automobiles . This incentive shall be available for a period of five years from the date of the approval of the corporate authorities of the City of Elgin of a participation agreement between the City of Elgin and an eligible dealer. Section 3 . Capital Investment Grant Program. Any retail automobile dealership operating in the Cook County portion of the City of Elgin is eligible to receive an investment grant equal to fifteen percent ( 15%) of a capital investment in an amount of Fifty Thousand Dollars ( $50, 000) or more but not to exceed Two Hundred Thousand ( $200, 000) . Capital improvements qualifying for such grant shall be completed within two years after approval by the corporate authorities of the City of Elgin of an agreement which includes a description of the capital improvements to be made between the City of Elgin and the dealership under this program. At the end of the first full month of the year following commencement of construction, one half of the estimated investment grant shall be paid. The remainder of the grant shall be paid at the earlier of the completion of construction or thirteen months after commencement of construction. No dealership shall be eligible for a grant more than once in a period of five years . Any grant amounts received shall be repaid if capital improvements for which a grant is received are not completed within two years . Section 4 . Business Retention Rebate. Any retail automobile dealership operating in Cook County who agrees in writing to continue such retail operation in the Cook County portion of the City of Elgin for a period of not less than five years is eligible to receive a retail sales tax rebate in the amount of thirty-five percent ( 35%) of the increase in retail sales tax received by the City of Elgin from the sale of automobiles . Any such rebate shall be repaid with interest if a dealership fails to remain for the five year period. The rebate shall be based on the increase in sales tax over the average retail sales tax distributed to the City of Elgin during the past three years by the participating dealer. Section 5 . In order to participate in the Cook County Automobile Dealers Rebate Program, an applicant shall submit copies of all relevant documents including but not limited to verification from the Illinois Department of Revenue ( "DOR" ) of the revenues and sales taxes paid for the past three years and shall execute a written agreement which shall include the items necessary to comply with the provisions of this ordinance including but not limited to the following: 1 . The Automobile Dealer' s agreement that, at any time upon the reasonable request of the City, it will demonstrate evidence of the cost of improvements equivalent to the City' s payments hereunder. 2 . The Automobile Dealer' s agreement that it will not, during the life of the agreement, protest, contest, or in any other way seek to lower the amount of property tax rate with respect to the property. Nothing herein contained shall prevent Automobile 2 Dealer from protesting the assessed valuation of the property. 3 . The Automobile Dealer' s agreement to promptly commence and diligent pursue renovation activities . Once construction has begun, Automobile Dealer agrees to construct the improvements, both on-site and off-site, in substantial accordance with plans and specifications submitted at the time of application. 4 . The Automobile Dealer' s agreement that in the event that Automobile Dealer' s motor vehicle dealership ceases to operate at the property at any time during the duration of the agreement, Automobile Dealer agrees to remit to the City monies received from the City pursuant to this agreement. In order to secure the requirement to make repayment, the Automobile Dealer shall post or cause to be posted in favor of the City, a performance bond, letter of credit, or such other instrument acceptable to the City (the "Credit Facility" ) in an amount equal to any amounts paid out. 5 . Within seventy-five ( 75) days after each annual period, Automobile Dealer shall provide the City with a statement signed by one of its officers as to the dollar amount of sales tax revenue paid to the State of Illinois for the benefit of the City during the prior annual period. Additionally, Automobile Dealer shall maintain and have available for inspection by the City copies of any and all sales tax returns, sales tax reports, amendments, proof of payment or any other sales tax information filed with the State of Illinois or other appropriate governmental entity, which documents are being held available for the City for purposes of identifying sales tax revenue collected pursuant to this agreement for calendar years 1996 through the life of this agreement. Additionally, the City shall use its best efforts to obtain such sales tax information directly from the Illinois Department of Revenue or the State of Illinois . To the extent permitted by law, the City shall endeavor to maintain the confidentiality of the information contained in such reports, but shall be permitted to disclose such information and documents to employees and consultants as the City (except for any consultant that has a financial interest in any motor vehicle dealership within the Chicago Metropolitan Area, which consultant shall not be retained) , in its sole discretion deems appropriate in order to monitor compliance and audit this agreement. Automobile Dealer also agrees, upon the 3 r - request of the City, to furnish such consents or waivers as may be required by the Illinois Department of Revenue to allow the Illinois Department of Revenue to furnish to the City sales tax information concerning the Automobile Dealer dealership. 6 . No recourse under or upon any obligation, covenant or agreement of this agreement or for any claim based thereon or otherwise in respect thereof shall be had against the City, its officers, agents and employees, in any amount or in excess of any specific sum agreed by the City to be paid to Automobile Dealer, subject to the terms and conditions herein, and no liability, right or claim at law or in equity shall attach to or shall be incurred by the City, its officers, agents and employees in excess of such amounts, and all and any such rights or claims of Automobile dealer against the City, its officers, agents and employees are hereby expressly waived and released as a condition of and as consideration for the execution of this agreement by the City. No recourse under or upon any obligations, covenant or agreement of this agreement or for any claim based thereon or otherwise in respect thereof shall be had against Automobile Dealer, its officers, agents and employees, in excess of their obligations to the City hereunder, subject to the terms and conditions herein, and no liability, right or claim at law of or in equity shall attached to or shall be incurred by Automobile Dealer, its officers, agents and employees, in excess of their obligations hereunder. 7 . The City and Automobile Dealer agree to do all things necessary or appropriate to carry out the terms and provisions of this agreement and to aid and assist each other in carrying out the terms hereof . 8 . This agreement shall be governed by the laws of the County of Kane, the State of Illinois, and the sole and exclusive venue for any disputes arising out of this agreement shall be any state or federal court located within the State of Illinois . A waiver of any part of this agreement shall be limited to that specific event and shall not be a waiver of the entire agreement. Any notices required in this agreement shall be effective when in writing and three ( 3) days after mailing by certified mail, return receipt requested, or by delivering the same in person or to an officer of such party or by prepaid telegram or private overnight courier, when appropriate, addressed to the party to be notified. 4 t r Section 6 . This ordinance shall be in full force and effect from and after its passage. s/ Kevin Kelly Kevin Kelly, Mayor Presented: August 28, 1996 Passed: August 28, 1996 Vote: Yeas 7 Nays 0 Recorded: August 29 , 1996 Published: Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk 5 MAY-16 97 10:54 FROM:CTY OF ELGIN FINANCE 7089315622 TO:8477416512 PAGE:06 • • CITY OF ELGIN COOK COUNTY AUTOMOBILE DEALERSHIP INCENTIVE PROGRAM APPLICATION FORM Business Name ELGIN TOYOTA Business Address. 1200 E. CHICAGO STREET City/State/'Zip Code. ELGIN, ILLINOIS 60120 Corporate Officer ROBERT LOQUERCIO Telephone (847) 741-2100 Federal Tax ID Number 36-4097417 Sales Tax 1D Number 2752-7026 If you arc interested in participating in the Cook County Automobile Dealership Incentive Program,please complete and return this application to: lames R. Nowicki, City of Elgin, ISO Dexter Court, Elgin, IL 60120(telephone 847-931-5625). Also,please provide three(3) copies of the appropriate documentation supporting the facet of the particular program in which you wish to participate. Participants in the rebate programs are required to submit Illinois Department r f Revenue documentation of revenues and sales taxes paid for the last three years (all documentation will remain confidential). Descriptions of plans for capital improvements must also he submitted at the lime of application to the program. Application is subject to review and must he approPed by the Elgin City Council. MAY-16 97 10:54 FROM:CTY OF ELGIN FINANCE 7089315622 T0:8477416512 PAGE:07 SALES' 7AX SHARING A(jRF<EMENT (Dealership capital investment must he more than 7011% of the average sales lax base(1993- 1995). Detailed Description of Capital Investment N/A Name of General Contractor: Address City/State/Zip. Telephone. Project Costs: Construction/Remodeling $ Other Capital Improvements S Average Sales Tax Base (1993-1995) $ Please provide the following documentation (all documentation provided will remain confidential): ► Copies of City of Elgin building permit receipts related to capital investment • Receipts for capital improvement purchases. • State of Illinois certified sales tax receipts(1993-1995) • Construction/bid documents(required for building permit) for building expansion/remodeling. ► Listing of capital items to be purchased. ► Copy of business plan, if available. ► Copy of most recent audited financial statement. MAY-16 97 10:54 FROM:CTY OF ELGIN FINANCE 7089315622 TO:8477416512 PAGE:08 INVESTMENT GRANT (Capitol ini'eslnnen1 mot he al leas!S50,000 and up to$200,000.1 Detailed Description of Capital investment (please include number of square feet improved) N/A Name of General Contractor Address City/State/Zip Telephone. Project Costs. Construction/Remodeling $ Other Capital Improvements $ Please provide the following documentation (all documentation provided will remain confidential); ► Copies of City of Elgin building permit receipts related to the capital investment. ► Receipts for other capital improvement purchases (e g; , furniture, fixtures, etc.). ► Construction/bid documents(required for building permit) for building expansion/remodeling. ► Listing of capital items to be purchased ► Copy of business plan, if available. ► Copy of most recent audited financial statement MAY-16 97 10:54 FROM:CTY OF ELGIN FINANCE 7089315622 TO:8477416512 PAGE:09 BUSINESS RETENTION REBATE (Dealerships must remain in Elgin for at least five years-- may not be used in conjunction with another incentive) Please provide the following documentation (all documentation provided will remain confidential): • Copy of five-year lease agreement (if property is leased) ▪ Affidavit, signed by an authorized officer, stating the dealership will continue their retail operations in Elgin for at least five years • State of Illinois certified sales tax receipts (1993-1995) AN supportive financial documents and required information must be supplied before the application will be considered by the Elgin City Council. We agree to all conditions specified in the Automobile Dealership Incentive Program. Signed: � _ Signed Title. PRE S IDEN Title: SECRETARY/TREASURER (Chief Corporate Officer) (Chief Financial Officer) Date MAY 16, 1997 Approved Attest Signed: Signed Kevin Kelly, Mayor Dolonna Mecum, City Clerk Date: _ 7 June 30, 1997 MEMORANDUM TO: James R. Nowicki, Finance Director FROM: William A. Cogley, Assistant Corporation Counsel SUBJECT: Agreements for Participation in Cook County Automobile Dealership Incentive Program Pursuant to your request attached find a contract between the City and Ron Hopkins Ford to formalize Ron Hopkins Ford participation in the Cook County Automobile Dealership Incentive Program. The City Council has previously passed a resolution approving Ron Hopkins Ford participation in the incentive program and as such no further City Council approval is necessary for execution of the agreement. Also attached is a draft agreement to provide for Elgin Toyota ' s participation in the incentive program. The agreement with Elgin Toyota requires City Council approval . A resolution authorizing execution of the agreement is also attached. 06" WAC nr Attachments cc : Michael R. Gehrman Richard G. Kozal Approved: Erwi W Jentsch • • OF FCC '! — City of Elgin Agenda Item No. %TE D 10 June 16 , 1997 TO: Mayor and Members of the City Council FROM: Robert O. Malm, Interim City Manager SUBJECT: Cook County Automobile Dealership Incentive Program Application - Elgin Toyota PURPOSE The purpose of this memorandum is to provide information to the Mayor and members of the City Council to consider an agreement with Elgin Toyota for participation in the Cook County Automobile Dealership Incentive Program. BACKGROUND On August 28, 1996 , the City Council passed an ordinance estab- lishing an incentive program for automobile dealerships located in the Cook County portion of Elgin. Application forms and program information were mailed to all dealerships in October, 1996 . The Cook County Automobile Dealership Incentive Program consists of three facets : 1 ) Sales Tax Sharing Agreement: Any Elgin automobile dealer- ship whose facility is located in Cook County may take advantage of the sales tax sharing agreement by making a capital improvement to their facility of more than 200 percent of the average sales base ( 1993-1995) . During the next five years, the eligible dealership will receive 50 percent of the increased local sales tax revenue generated over the business ' s sales tax base. g 2 ) Investment Grant Program: Automobile dealers who make capital investments of at least $50, 000 and up to $200, 000 may be eligible for a 15 percent investment grant from the City. Upon approval, a participating dealer has up to two years to complete capital improvements . The City will pay half of the grant amount in the first month that improve- ment construction begins, with the balance being paid in thirteen months or when construction is completed, which ever comes first. The required improvements must be cam- pleted within the two-year period or all grant money previ- ously distributed will be forfeited. Dealers are eligible for the Investment Grant Program only once every five years . Cook County Automobile Dealership Program Application June 16 , 1997 Page 2 3) The Business Retention Rebate: To be eligible for the 35 percent business retention rebate, a dealership must agree in writing to continue their retail operations in Elgin for a period of at least five years . The dealership is also required to supply the City with Illinois Department of Revenue documentation of the revenues and sales taxes paid for the years 1994-1997 . All sales tax information re- ceived from the Illinois Department of Revenue is required to remain confidential . Elgin Toyota has submitted an application and all required documentation for participation in the business retention rebate facet of the program. The Illinois Department of Revenue has verified the sales tax receipts for the dealership during the previous three-year period ( 1994-1997 ) . Upon execution of a participation agreement, the dealership will be eligible to receive a 35 percent rebate of the increase in sales tax re- ceipts (June, 1997 through May, 1998 ) over the previous three- year average. Example: Average 3-Year Sales Tax Receipts ( 1994-1997 ) $250, 000 Sales Tax Receipts ( 6/97 - 5/98) Assuming 20% Increase $300, 000 Annual Rebate to Dealership ( 35% of $50, 000) $ 17 ,500 COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT , t_ The exact rebate amount will not be known until completion of the twelve month period following approval of the participation agreement (June,1997 through May, 1998) . Adequate monies are available in the Elgin Riverboat Fund, account number 275-0000-791 . 80-27 - Economic Development Incentives - to fund this program. LEGAL IMPACT None. ALTERNATIVES None. Cook County Automobile Dealership Program Application June 16 , 1997 Page 3 RECOMMENDATION It is recommended that the Mayor and members of the City Council authorize staff to enter into a participation agreement with Elgin Toyota for the business retention rebate facet of the Cook County Automobile Dealership Incentive Program. Respectfully submitted, 014-14.4 elz- 4-0-tArt4f .mes R. Nowicki inance Director Xl &Pi, 0 es* /4-7, Robert O. Malm Interim City Manager JRN/daw Attachment